Collaboration And Capitalism: Barron's Wealth Gap Event Speakers Address American Financial Inequities

On Tuesday, Barron’s hosted The Wealth Gap: Ideas to Action, an event focused on the actions and initiatives corporate and philanthropic leaders are implementing to address the global wealth gap.

Participants in the discussion included Darren Walker, president of the Ford Foundation; Calvin Butler Jr., CEO of Exelon Corporation EXC's Utilities unit; Dana Peterson, chief economist and center leader of economy, strategy and finance at The Conference Board; and Jennifer Jones Austin, CEO of FPWA.

Collaboration And Capitalism: Walker said implementing meaningful policy changes that will help narrow the wealth gap will take a collaboration between the public and private sectors, and Americans should work together to empower governments to make changes, holding them accountable for their failures and inaction.

The pandemic widened the wealth gap by hurting many struggling Americans while the SPDR S&P 500 SPY rallied to new all-time highs, making wealthy investors even wealthier.

“We had a historic one-year return for our endowment,” Walker said. “As most Americans were falling farther behind, those of us who were invested in the stock market, in real estate, had second homes, are significantly better off.”

Unfortunately, Walker said many young Americans have become disillusioned with the capitalist system that ' responsible for generating all the wealth in America, putting them at risk of missing out on its benefits.

“We have 40% of people under the age of 40 that do not believe capitalism is the best way to organize an economic system. Those of us who are capitalists should be deeply concerned about that reality,” he said.

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Not A Zero-Sum Game: Butler said Exelon took the initiative to address difficult issues of racial inequities way back in 2017, in part through its executive White Men and Allies lab. He said the goal of the lab was to get all of Excelon’s executives on the same page when it comes to tackling diversity issues and make sure that everyone understands that a successful, diversified environment is not a zero-sum game.

“We have to break that old adage that if someone is gaining, someone else is losing,” Butler said. “And the White Men and Allies lab really allows for that conversation to take place.”

In 2020, Peterson complied an important report for Citigroup Inc C that found social injustices have cost the U.S. economy an estimated $16 trillion over the past 20 years.

“We’re leaving a lot of money on the table, and rather than making it just a moral argument, we’re making it an economic argument,” Peterson said.

Ensuring Equal Opportunities: Peterson said minority Americans also need to invest in themselves to make sure they're prepared to take advantage of potential opportunities, including educating themselves and taking risks in the market.

Austin said much of the persistent racial wealth gap in the U.S. is rooted in systemic American racism.

She said closing the race and gender pay gaps will go a long way in helping to address the racial wealth gap, especially considering a disproportionately high percentage of black women are household breadwinners.

“You have black women who have graduate degrees making the same as a white man with a high school diploma,” Austin added.

She said the government must focus on fairness in pay and debt that is holding back too many lower-income Americans. In addition, she said black and rural communities need more banking and investment in small businesses.

(Photo by Sharon McCutcheon on Unsplash)